gas pumpChrysler’s latest incentive to reverse faltering car sales is fascinating. Car and Driver reports (via Yahoo!) that Chrysler will guarantee $2.99 gas to customers who purchase a new Dodge, Jeep or Chrysler vehicle from May 7 through June 12.

Here in San Francisco, the average cost of gasoline is $4.05 per gallon. (You can check prices for your location at MSN Autos.)

Sounds like an amazing deal for those of us in pricier metropolitan areas. However, looking at restrictions that apply and doing some number crunching makes this program look a bit’¦ shrug inducing.

First off, you can only choose between a typical cash rebate incentive or the $2.99 gas program. If you choose the gas program, you’re given a gas card by Chrysler that is registered with your Visa or Mastercard. Swipe your gas card, and the cost of filling your tank is sent to a third party who separates the charges. The customer is charged only $2.99 per gallon on their Visa or Mastercard, and Chrysler is charged the difference.

Restrictions: only gas up to 87 octane is covered. Mid-grade or premium gas costs the customer extra. The program is limited to 12,000 miles per year only.

Number crunching: let’s say your car gets an average of 22mpg. 12,000 miles / 22 means that only 545.45 gallons of gas per year is covered by the program. If gas in your area is about $3.50 per gallon (average price in the U.S.), then .51 ¢ x 545.45 gallons = $278.18 in annual savings. Over the course of three years (assuming price does not fluctuate from average), you’d only save $834.54.

But lets say on the extreme end of things that gas prices were to reach $4.50 per gallon by this summer. The customer with the 22 mpg car will save $818.18 in one year, or $2,454.53 over the course of three years (again, assuming gas price does not fluctuate).

Should prices go below $2.99 per gallon, there’s no use for the gas card. Good for Chrysler, bad for the customer.

Depending on the future of gas prices, Chrysler has either saved their business or screwed their company and investors royally.

Why didn’t Chrysler just divert the money they invested in this program into making more fuel efficient cars or research alternative, cleaner fuels?

What do you folks think?